Penguin Solutions designs, builds, deploys, and manages AI and high-performance computing (HPC) infrastructure for enterprises, governments, and cloud service providers. The core business — operated under the Penguin Computing and Penguin Solutions brands — involves integrating compute, memory, networking, power, and cooling into large GPU clusters, typically through a 12-to-18-month sales cycle. Penguin Solutions earns lower-margin hardware revenue upfront when a cluster is deployed, then earns higher-margin recurring revenue from managed services and software contracts. The proprietary cluster management platform, ICE ClusterWare, monitors and optimizes AI infrastructure across hardware vendors. Penguin Solutions also sells specialty DRAM and flash storage under the SMART Modular Technologies brand, differentiating commodity memory silicon with custom firmware, specialized packaging, and high-reliability specifications for OEM customers in industrial, networking, and government markets. A third segment, Cree LED, sells LED chips and components for lighting and displays, though this business faces secular headwinds from oversupply and subsidized competition. Penguin Solutions' growth strategy centers on expanding its enterprise and federal customer base, growing its recurring services and software revenue, and extending its reach through channel partners like Dell and CDW. SMART Modular is also developing next-generation memory products targeting AI cluster performance bottlenecks. SK Telecom made a $200M preferred share investment in early 2025, establishing a strategic collaboration and go-to-market partnership.